Survey: Nearly Half of Hawaii Businesses Did Not Pay Full Rent Last Year
This was the first survey to include survey respondents from outside Hawaii. According to the survey, 49% of Hawaii businesses and 56% of businesses outside Hawaii said they did not pay full rent from April to December last year. Restaurants, retail, entertainment and wholesale trade businesses were hit the hardest.
63% of businesses said they didn't think they would survive 2021 without government funded rent relief.
Ryan Tanaka, president of Island Business Management, said some businesses have racked up 12 months of back rent due to the pandemic.
"We all understand that small businesses are the backbone of our economy because they provide jobs, increase tax revenue and provide many aspects of the Hawaii experience," Tanaka said. "That's why Love's Bakery closing really resonates because it's an iconic brand with 230 employees. So despite receiving a second round of PPP (Paycheck Protection Program), many businesses are still unable to address their accumulated back rent."
He added that businesses will have trouble paying rent in the future, too, as the economic recovery is gradual and many businesses can still only operate at half capacity.
However, help may be on the way. Tanaka says there have been talks with Honolulu Mayor Rick Blangiardi on creating a rent relief program that could provide up to 3 months of rent payments for businesses. There are also two bills at the Hawaii State Legislature, SB 946 and HB 1324, that would earmark federal funding for rent relief.
A partnership between the state Department of Business, Economic Development and Tourism, Seattle-based Center for Housing Economics, National Association of Industrial and Office Properties, and others in Hawaii's business community, expanded the research scope at the end of 2020 to include data from businesses across the country.
Roger Valdez, founder of Seattle For Growth's Center for Housing Economics, said it partnered ont he survey to combat misinformation about housing with better data, better ideas and with a hope of changing the narrative.
"The big picture is that commercial and residential real estate are tightly woven together," Valdez said in a statement. "When businesses close, individuals lose their jobs and their income, which ultimately translates to the inability to pay their rent."